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Is there such thing as Affordable Individual Health Insurance Plans?

Updated on December 29, 2010

Shopping Tips: Medical Insurance Coverages for Individuals

When shopping for individual health insurance plans our minds are often subjected to information overload, and the apprehension of the associated fees and the worry of signing a policy that won't have us and our household covered for problems we may actually encounter. Subsequently we look to get quotes on-line from health insurance companies, but we examine only what we are able to understand and usually by price not benefits. Searching for rates online is a great place to start, but may leave us short when it comes time to understanding what is really being offered.

We examine the cost of the monthly premiums, the maximum out-of-pocket costs, the deductibles, the co-pays etc. We rarely take into consideration what buying individual medical insurance is really for and how to best evaluate the true benefits of the overages available. Cost is only a small part of the equation but it’s what we focus on the most. We all want the same thing – the “Best” coverage at the lowest possible premium. But what is best for one family is very hard to determine. After all we really have no idea what may or may not happen to our health down the road. Even people who “take care” of themselves are subject to accident and unforeseen circumstance.

Let’s take a look at a couple of factors revealed by experienced insurance brokers with regard to Buying Individual Health Insurance Plans. We hope this will allow you to choose your particular insurance carrier and a health insurance policy that truly suits your needs and your budget.

Remember what insurance is designed to offer you. Medical insurance coverage is designed to protect you from catastrophic financial damages such as an accident which could require prolonged hospitalization or from serious diseases that require expensive treatments or medications for the remainder of your life.

Bear in mind most individuals are attempting to get a lot more medical services out of their health insurance coverage than they want to pay in. This is human nature as we all want the biggest bang for the buck. And once people have medical coverage they tend to take advantage of this fact by using the coverage. However insurance coverage doesn’t mean “Free”. Somebody is paying for the visits, the medications and the care. Medical Insurance like all insurance is about managing risk pools. If everyone uses the services the only way to manage the pool of risk is to raise the premiums. So look carefully at what you really need, and how you plan to use the coverage so that you make your best choice.

Some people will in fact get out of their policy more than they put in – but realistically this is not something you want to have happen. That would be like saying you want to have a car accident because you paid in a lot to premiums and you want to get something back out. Do you really want to be unhealthy and sick in order to get back your investment from your health insurance plan? The answer is clearly no! What you want is protection in case something happens… but you do not want something to happen.

An insurance broker or health insurance agent can shop the different insurance carriers for you, but each plan from a particular insurance provider will cost the identical regardless of which broker you buy it from. The reason for this is premiums are regulated by state laws. Once a risk pool price is established by a company that same price applies to all those who qualify for the standards which meet that pool.

Another underlying factor is the truth that the medical insurance carriers set their rates and premiums and have the brokers' commissions figured in those rates. So chances are you'll go to a few brokers just to make sure they are presenting you'll all of the offerings, but it's worthless to try negotiating a premium type a specific plan. You are not going to get a better rate from the same plan just by changing brokers or agents. It can seem at times like a big Monopoly where everything is price controlled and you just pick the plan and live with the price. The reality is it kind of is this way. This is not like negotiating for the price of a new car. You pay whatever price that company is offering and that’s it. This is why it’s so important if you can to get insurance through larger pools like through your employer. The larger the risk pool the more likely the actuary will have determined the available participants are a lower risk, thus a lower cost. The smaller the risk pool in general, the higher the risk thus the higher the premium you will pay.

You will have with most individual health insurance plans the ability to alter some components of the plan to change the premium by electing more or less coverage by agreeing to raise the deductibles. But again there isn’t a lot of flexibility in most plans. So it really is important that you read and fully understand what you are signing. A good Agent or Broker will be well versed in what is actually covered and can explain this too you. Hopefully they are looking to make you a lifelong customer and not just looking to make a quick buck off of you.

Find a Broker or Agent you trust. Look realistically at your Families Financial situation and purchase enough coverage to take care of you in the event of a major illness. Remember that it is often cheaper to pay for the “little things” than to buy the Cadillac plan the covers everything. If you feel healthy and have a good medical family history go ahead and choose the higher deductibles… just make sure you can live with the results if something catastrophic does happen.

Understanding the Options in your Individual Health Insurance Plan is actually more important than the cost of the premiums - you MUST know what you are buying in order to insure your protection in the event of a major catastrophic illness.
Understanding the Options in your Individual Health Insurance Plan is actually more important than the cost of the premiums - you MUST know what you are buying in order to insure your protection in the event of a major catastrophic illness.

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